What was NASA’s big announcement about?In 2010, NASA began funding the development of private manned spacecraft to serve as a replacement for the space shuttle, which was retired in 2011 after 30 years flying. NASA hoped it would be cheaper to stimulate firms to build private vehicles that it could buy rides on than it would be to create its own spacecraft. Yesterday, it announced that Boeing and SpaceX will receive contracts for &dollar;4.2 billion and &dollar;2.6 billion respectively, with the first taxis due to launch from Cape Canaveral in 2017. Both firms will fly between two and six missions.

How do US astronauts get to space now?NASA has been reliant on Russia’s Soyuz spacecraft to deliver astronauts to the ISS, paying &dollar;70 million per seat for the privilege. This is a sore point for some US politicians, but Russia’s annexation Crimea and the subsequent cooling of US-Russia space relations has made finding a replacement for the shuttle even more pressing.

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How will these two companies do it differently?Boeing is an industry stalwart, having been involved in the Apollo missions to the moon and the space shuttle programme. The design of its CST-100 capsule echoes the Apollo command module and can seat seven people. It will launch on an Atlas V rocket, a commonly used US launch vehicle manufactured by United Launch Alliance, a joint venture between Boeing and Lockheed Martin.

SpaceX is the young upstart with an increasing space presence – it already delivers cargo to the ISS with its Dragon capsule. A new version of Dragon, unveiled earlier this year will carry up to seven astronauts and eventually land back on solid ground rather than splash down in the ocean. It will launch on SpaceX’s Falcon 9 rocket, which the company plans to make reusable.

What do the firms need to do to get in shape for the 2017 target launch date?Both companies are yet to fly their spacecraft. Their contracts with NASA say they must perform at least one crewed test flight to the ISS with at least one NASA astronaut on board before they can start regular taxi runs. Rumours also suggest that Boeing will today announce a partnership with Blue Origin, a firm founded by Amazon CEO Jeff Bezos, to develop a new rocket engine. The current engines for the Atlas V rocket are supplied by Russia, which has threatened to cut off the supply.

What about other space companies?One firm losing out in yesterday’s announcement is Sierra Nevada, which is developing a mini version of the space shuttle called Dream Chaser. It had hoped to receive a space taxi contract from NASA but will now have to rely on deals with the European and Japanese space agencies.

Orbital Sciences, the other company delivering cargo to the ISS, says it has no plans to develop crewed spacecraft.

How will private space flight change things?NASA’s original aim in encouraging private space taxis was to reduce the cost of access to space. That could mean more astronauts on board the ISS, which would allow NASA to expand its scientific operations on board the station, said Bolden.

It also frees up NASA to do other things. “Turning over low Earth orbit transportation to private industry also will allow NASA to focus on an even more ambitious mission – sending humans to Mars,” said Bolden. The agency is currently developing its Orion craft, due to launch on its first uncrewed mission later this year, which it hopes will eventually send humans to an asteroid and then on to Mars.

As private companies, Boeing and SpaceX will also be able to sell rides to non-NASA customers, which could include space tourists. And more flights to space could encourage demands for destinations in low Earth orbit besides the ISS – Bigelow Aerospace has long-held plans for developing a commercial space station formed of inflatable modules. SpaceX is due to launch a test module for Bigelow next year.

In the long term, SpaceX’s Dragon capsule could be the precursor to colonising Mars – founder Elon Musk has quipped he wants to die on the Red Planet, just not on impact.